Brewer’s World

Behind every successful man is a good woman, a saying used to run. These days we may more practically assert that behind many a successful non-marine venture is a marine manager or marine pedigree.

Thomas Miller group, which manages mutuals that provide cover in many forms for a large portion of the world shipping fleet, has quietly for years run companies that are in totally unrelated sectors, but its marine reputation does add sheen to the mix.

Consider the subsidiary BLP (Building LifePlans), which provides building defects insurance to builders and developers of residential and commercial schemes. Simon Main, its managing director, is a familiar figure to many in the maritime world. Main, whose family has a shipping background, started with Thomas Miller 25 years ago as a claims handler for the UK P&I Club, dealing with such problems as personal injury to crew and passengers, and the repatriation of stowaways.

In this absolutely non-commoditised side of insurance, Main was then assigned to handle collision and cargo claims, which in turn was followed by a spell of assisting Japanese shipowners, and later helping set up a P&I office in Hong Kong.

After new roles in marketing and underwriting, he moved on to developing new business suitable for investment by Thomas Miller, and it was this that took him across the divide into non-marine. Through running a mutual for housing associations, he and his colleagues built up expertise in understanding the risk management of construction and property for rent. Out of that work came the current company BLP, designed to serve the property market. Main was seconded to BLP for six months, and six years later he is still there – without any regrets, he says.

BLP acts as an underwriting agent of the UK branch of Allianz Global Corporate & Specialty, assessing whether the defects risks it sees are insurable. Its practice clearly appeals to the marine man inside Main as a niche operation in the UK market, focusing on new building and refurbishment inherent defects insurance and on technical expertise in that field. The insurance covers the property not the developer, and defects are defined here as those that would lead to damage to a structure.

The number of players is limited, but there is competition – mainly from the National House-Building Council warranty and from Premier Guarantee. Another provider, Zurich, recently closed its doors to new business of this type. With its Buildmark warranty, NHBC claims to cover more than 80% of new homes built in the UK, having had a more than 60-year start on BLP, but Main refuses to be drawn into a pricing battle.

Having seen a dramatic UK housing slowdown, BLP insists that in line with the overall philosophy of Thomas Miller, it is taking the long-term view over securing business. While it is not the cheapest, it says that its cover is deeper and wider than others, backed by an in-house team to carry out quality assessment on all risks. There is no legislative driver on this type of cover, but the mortgage lenders demand a certain level, which the BLP product goes well beyond.

The property market is beginning to pick up, and London mayor Boris Johnson wants the capital to show that it is possible to mastermind the building of new homes at a time of public spending cuts. He aims to have more than 32,000 affordable homes built on under-used land owned by the Greater London Authority, and in all is confident that his policies will rapidly deliver 50,000 affordable homes.

In this sphere, as in so many others, the insurance industry is pioneering technical know-how, with Main’s firm making available to housing associations a construction lifecycle software programme, which produces a maintenance prognosis as well as looking at the capital cost of building. This helps the associations gain the key to the funding they need – and it promotes sustainability.